From Big Idea to the Next Big Thing

Academia provides the tools that help budding entrepreneurs launch companies from campus.

Dow Chemical. Parker Hannifin. Lubrizol. Craigslist. LorkTech.

LorkTech?

True, the first four are household names, and a mere handful of folks have yet heard of the fifth.

But if, as Shakespeare says, past is prologue, then plenty more people will learn of LorkTech before long.

The common element among this quintet is pedigree. Each emerged from the mind, will and pure hard work of graduates of Case Western Reserve. While Dow began in 1897 and LorkTech didn’t launch until 2010, the founders of both benefitted from the university’s unusual mix of rigorous academics and emphasis on application of knowledge. If anything, the concept of translation—taking discoveries from the campus to the marketplace—has become more commonplace over time. And, if a series of recent initiatives gain as much traction as participants hope, Case Western Reserve’s future will see even more successful inventions and start-ups in the decades ahead.

“Research is the process of generating new information and novel discoveries,” explains Robert H. Miller, PhD, named the university’s vice president for research in October 2011. “Our goal is to take steps within the campus that enhance and accelerate the process of bringing those discoveries to society.”

From new academic programs to a proposed 50,000-square-foot innovation laboratory, the university is adopting an even more activist stance in educating its students and faculty about ways to bring ideas to those who will benefit most—and engaging the broader community in a more focused and strategic way.

The story of LorkTech embodies these ideals, albeit from a modest beginning. The company’s origins trace to a round of exams, and undergraduate Mark Lorkowski’s search for soda with caffeine to help get him through the studying. Yet when he reached the aisle with the coveted cans, he found the shelf price higher than expected—in fact, it later proved to be wrong. The seemingly insignificant error prompted a brainstorm—couldn’t technology help avoid such errors?

A background in computer science and system controls quickly led Lorkowski to think of the benefits of electronic shelf labels with displays easily updated by remote. From there he got to wondering why the technology hadn’t taken off in the United States the way it had in places like Europe. He started talking to classmates in an entrepreneurship course at the Weatherhead School of Management, and the group got advice from Weatherhead and engineering faculty. They networked within the community and received assistance from organizations like the nonprofit business accelerator JumpStart. Last year, the students competed in the university’s Saint-Gobain Student Design Competition, taking second place and a $5,000 prize.

Before long, a business was born. LorkTech has a patent pending and a powerful sense of social mission. With electronic shelf displays, stores also could lower prices of perishables like fruit as their expiration date grew near, reducing the amount of wasted food. They no longer would use reams of paper and plastic to label items, thus reducing the impact on the environment. And, ultimately, the team envisions a device that could provide consumers additional information—even other customers’ reviews—with the click of a smartphone. Best of all, their model is less expensive and more durable than those found in Europe, and it relies solely on ambient light. In other words, they don’t need a separate power source. The team estimates the American market at $60 billion, with current players capturing less than 3 percent of that total. Of course, they still have to finalize their prototype, identify means of mass production and capture a client base.

“That’s what entrepreneurship is all about,” explains Julius Korley, PhD, a consultant to the university’s technology transfer office and co-founder of his own new company. “It’s jumping into the deep end and working your way past the obstacles that you face.”

A Partnership with Society

U.S. taxpayers invested $37.5 billion in research efforts in the nation’s colleges and universities in 2010, the most recent year for which federal figures are available. In that same year, colleges and universities created more than 657 new products and 651 new companies, according to the Association of University Technology Managers.

Perhaps the most famous example of the mutually beneficial relationship between academia and industry is evident in the ubiquitous orange cooler seen on football sidelines every fall. Gatorade emerged from a 1965 conversation between a University of Florida football coach and campus physicians about how best to keep players from being leveled by the heat. The doctors decided the best answer would be a drink that both hydrated the athletes and replaced crucial electrolytes. The tangy drink earned the university $61.5 million in royalties by 2000, and the dollars continue to roll into the Gainesville campus.

Yet Gatorade isn’t the top revenue generator for an academic institution. That distinction belongs to an anti-AIDS medication developed at Emory University, which in 2005 sold its royalties to two private companies for $540 million.

Emory President James Wagner, PhD, formerly the provost and dean of engineering at Case Western Reserve, vowed at the time that the proceeds would go back into campus research to support future discoveries to benefit humankind.

Case Western Reserve President Barbara R. Snyder embraces this idea of academia’s fundamental obligation to serve others. As she explained in a 2008 address to the City Club of Cleveland: “Research universities are part of a unique compact in this country. The public places enormous trust in our institutions, investing not only substantial financial resources but also a family’s most precious resource, their children. In return we provide education for our students and advancement for society at large.“

From 2005 to 2010, Case Western Reserve spun out 22 companies, among them CardioInsight, a company pioneering a way to examine the heart’s electrical activity without an invasive procedure, and Neuros Medical, a firm dedicated to relieving patients’ chronic pain through an electronic implant rather than pharmaceutical medications, which often carry with them significant side effects as well as risks of addiction. During the same period, the university accumulated more than $70 million in licensing revenues, which accrue when the university sells, or licenses, its discovery to another entity. These resources support research and technology transfer efforts at the university level, as well as within the department from which the breakthrough came.

“That’s what entrepreneurship is all about,” explains Julius Korley. “It’s jumping into the deep end and working your way past the obstacles that you face.”

Untapped Potential

When compared with universities with comparable research efforts, such statistics put the university among leaders in its field. But across the institution, from President Snyder to Vice President Miller to faculty and students alike, a pervasive sense of immense untapped potential exists. This perception led Miller to travel to a handful of the nation’s most distinguished universities to learn more about how they advance efforts to take concepts to commercial applications. He has spent the past several months emphasizing the university’s commitment to be more flexible and nimble in working with outside entities willing to partner with the university, and has emphasized the importance of encouraging greater industry investment in university research.

Such assessments and reassessments are taking place across campus. In recent months the School of Medicine has appointed two chief translational officers, each with extensive experience in health care and venture capital. Their task is to engage with faculty to identify research with potential product application, provide guidance about development and help connect scientists with outside investors and private entities. At the same time, the school has convened a national group of advisers called the Council to Advance Human Health. This 18-member group includes leaders of prominent biomedical corporations as well as venture capital firms focused on the health and pharmaceutical sectors.

The group’s task is to provide an expert perspective on faculty proposals, advising on which concepts deserve additional development, which merit additional financial support from the school, and so on.

“As researchers, we are trained to think of the next great scientific question to tackle,” explained School of Medicine Dean Pamela B. Davis, MD, PhD. “But to bring discoveries to patients, we need more of that real world perspective.”

Korley, the consultant with the technology transfer office, has spent the past several months working to find those answers for Affinity Therapeutics, the biotechnology company he co-founded with Horst von Recum, PhD, associate professor of biomedical engineering. This spring the concept won a prestigious grant through Innovation Corps, a venture from the National Science Foundation aimed at accelerating researchers’ course to commercialization. Working with a local business adviser, Thomas Facklam, they engaged in two intense entrepreneurial “boot camps” at Stanford University.

“It was an eye-opening experience,” Korley says. “You can only theorize so much. What you really have to do is get out and talk to the customers.”

The team originally thought their primary customer for their drug-delivery polymer would be surgeons eager to reduce infections. But they quickly realized that those who actually purchase such supplies are hospitals, whose decisions often are influenced by the policies of federal and private insurance plans. They also learned that while their concept has multiple applications, they should consider focusing first on a single option. The company now has a site in Valley View, Ohio, and a revamped launch strategy; their next step is to identify additional funding to develop their first offering.

“It was a great opportunity,” von Recum says. “The timing was perfect.”

Even as the federal government and campus leaders look for ways to educate faculty about translation options, others continue to focus on students. Just more than a decade ago, Cyrus Taylor, PhD, now dean of the College of Arts and Sciences, launched the Physics Entrepreneurship Program to give future scientists experience in applying their ideas in a business context. The program since has expanded to become the Science and Technology Entrepreneurship Programs, and Taylor has been named a fellow of the American Physical Society for his contributions to graduate education and has earned Stanford’s Price Institute Innovative Entrepreneurship Educators Award. Meanwhile, law professor Craig Nard, JD, last year launched the FUSION graduate certificate program to provide graduate and professional students a setting where they can learn with students from other disciplines about the complexities of intellectual property and innovation as they relate to entrepreneurial efforts. This year Nard hopes to create a Venture Clinic where law students can gain additional real-world experience by advising start-ups. As a result, students from all disciplines can gain insight and experiences beyond their fields.

“Graduate education is often focused on silos,” Nard explains. “… What FUSION seeks to do is train PhDs and engineers in principles of business and law and train law students to be conversant in principles of business and science.”

Case Western Reserve also is part of Blackstone LaunchPad, a national entrepreneurship initiative that offers students the skills, knowledge, mentorship and guidance to bring their big ideas to fruition. In conjunction with The Burton D. Morgan Foundation, The Blackstone Charitable Foundation invested $3.2 million to start Blackstone LaunchPad on this campus and three others in Northeast Ohio.

The most concrete evidence of the university’s growing emphasis on impact beyond the university can be seen in a hulking storage building on the southwestern edge of campus. The 50,000-square-foot space is scheduled to be the future home of think[box], an ambitious effort to pull together students, faculty and even community members in a collective effort to experiment, tinker and, ultimately, take ideas to market. The engineering school opened a 3,000-square-foot temporary think[box] space last year, and the concept has drawn major commitments from Invacare Corp. leaders A. Malachi Mixon III and J.B. Richey ($5 million), alumnus Barry Romich ($1 million) and alumnus and trustee Larry Sears, who with his wife and fellow alumna, Sally Zlotnick Sears, pledged $5 million to inspire additional donations to the $25 million initiative.

Not only is the prospect of new space enticing, but it also offers the advantage of being a place specifically intended to engage a broad range of people and ideas— that is, to provide just the mix of expertise and insight most likely to lead to meaningful innovation.

“It absolutely is a statement,” explains Gary Wnek, PhD, faculty director of the Institute for Management and Engineering. “It is a combination of the physical space, the cool equipment and the ability to make prototypes that’s helping promote a culture around innovation and entrepreneurship at the university.”